DT6922 - DT: Falkland Islands: double taxation agreement, Article 24: Elimination of double taxation
(1) Subject to the provisions of the law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom (which shall not affect the general principle hereof):
(a) Falkland Islands tax payable under the laws of the Falkland Islands and in accordance with this Arrangement, whether directly or by deduction, on profits, income or chargeable gains from sources within the Falkland Islands (excluding in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits, income or chargeable gains by reference to which the Falkland Islands tax is computed;
(b) in the case of a dividend paid by a company which is a resident of the Falkland Islands to a company which is a resident of the United Kingdom and which controls directly or indirectly at least 10 per cent of the voting power in the company paying the dividend, the credit shall take into account (in addition to any Falkland Islands tax for which credit may be allowed under the provisions of paragraph (a) of this sub- paragraph) the Falkland Islands tax payable by the company in respect of the profits out of which such dividend is paid.
(2) Subject to the provisions of the law of the Falkland Islands regarding the allowance as a credit against Falkland Islands tax of tax payable in a territory outside the Falkland Islands (which shall not affect the general principle hereof):
(a) United Kingdom tax payable under the laws of the United Kingdom and in accordance with this Arrangement whether directly or by deduction, on profits, income or chargeable gains from sources within the United Kingdom (excluding in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any Falkland Islands tax computed by reference to the same profits, income or chargeable gains by reference to which the United Kingdom tax is computed;
(b) in the case of a dividend paid by a company which is a resident of the United Kingdom to a company which is a resident of the Falkland Islands and which controls directly or indirectly at least 10 per cent of the voting power in the company paying the dividend, the credit shall take into account (in addition to any United Kingdom tax for which credit may be allowed under the provisions of paragraph (a) of this sub- paragraph) the United Kingdom tax payable by the company in respect of the profits out of which such dividend is paid.
(3) For the purposes of sub-paragraphs (1) and (2) of this
Paragraph, profit, income and chargeable gains owned by a resident
of a territory which may be taxed in the other territory in
accordance with this Arrangement shall be deemed to arise from
sources in that other territory.
(4) Subject to sub-paragraph (5) of this Paragraph, for the
purposes of sub-paragraph (1) of this Paragraph, the term "Falkland
Islands tax payable" shall be deemed to include any amount which
would have been payable as Falkland Islands tax for any year but
for an exemption or reduction of tax granted for that year or any
part thereof under:
(a) section 3 of the Taxes and Duties (Special Exemptions) Ordinance 1987 so far as this provision was in force on, and has not been modified since 30 December 1996, or has been modified only in minor respects so as not to affect its general character; or
(b) any other provision which may subsequently be made granting an exemption or reduction of tax which is agreed by the competent authorities of the territories to be of a substantially similar character, if it has not been modified thereafter or has been modified only in minor respects so as not to affect its general character.
(5) Relief from United Kingdom tax by virtue of sub-paragraph (4) shall not be given:
(a) where the profits, income or chargeable gains in respect of which tax would have been payable but for the exemption or reduction of tax granted under the provisions referred to in that sub-paragraph arise or accrue more than ten years after the date on which this Arrangement enters into force; or
(b) in respect of profits, income or chargeable gains from any source if that income or those profits or chargeable gains arise in a period beginning more than ten years after the exemption or reduction referred to in that sub-paragraph was first granted in respect of that source, whether that period began before or after the entry into force of this Arrangement.
(6) The period referred to in sub-paragraph (5)(a) of this Paragraph may be extended by arrangement between the Government of the territories.
